Learn Forex Trading – The Forex market or also known as the currency market, is the largest and most liquid market on the planet, a large amount of currencies are traded as countries exist. In this market a large amount of operation is generated, exceeding five trillion dollars of commercial transactions per day, such is the magnitude of these transactions that the volume of transactions carried out in the New York stock exchange does not even reach the 2 percent of those made in the Forex market.
How does the Forex market operate?
The Forex market operates with currency pairs, which are traded through online platforms called brokers. The operation is as follows, there are two types of currencies, for example EUR / USD, the base currency would be the euro and the secondary currency the dollar. Indeed, if the exchange rate of the EUR / USD currency pair is 1.2345, it means that for each euro, you can buy 1.2345 dollars. If, for example, there is an increase in the exchange rate of the currency pair, it means that the base currency is strengthening against the secondary currency. If the exchange rate shows a decline, it would mean that the base currency is weakening against the secondary currency.
If we believe that the value of the euro currency will increase relative to the US dollar, we would buy the EUR / USD pair. On the other hand, if we believe that the value of the euro will fall compared to the dollar, we would sell the EUR / USD pair.
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Characteristics of the forex market?
The first characteristic is its liquidity, due to the fact that a large number of transactions are carried out reaching five trillion dollars a day, you can operate in the foreign exchange market whenever you want while it is open. The second characteristic of this market is that it is decentralized, you can operate in the foreign exchange market from anywhere in the world. The third feature occurs in the Forex market five days a week, 24 hours a day.
Opening of forex markets
Opening of forex markets. The best hours to invest in the currency market or commonly known as the Forex market.
The times of greatest liquidity where there is a greater number of participants, where there is a greater volume of business, and therefore, greater facilities to buy and sell, are from 3 am New York time to 3 pm New York time. During this period, many market players take part, for example, the European stock exchanges become operational. Let us remember that London is the place par excellence of the Foreign Exchange market and where the most currencies are traded.
It is very important that there are many people participating in the Forex market, not only for the ease of buying and selling, but also because the margins of difference between the purchase price or the difference between the sale price are reduced when there is great liquidity in the market, On the contrary, after three in the afternoon New York time, the markets become flatter, the margins widen, what is suggested in this period is to rest or begin to carry out analysis.
Later, after seven at night New York time, the markets of Asia and Oceania come into operation, more players participate in the market again and it acquires a new dynamic. Regardless of the schedule, it is having a good investment methodology, being consistent and disciplined.
Without a doubt, knowing the opening hours of Forex markets brings with it better opportunities for investors, since a greater number of active investors will bring with them better opportunities to buy and sell currencies. Now you know what is the best time to trade in the forex market, but just knowing this is not enough, a good investment methodology is what makes the difference.
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